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The Investor Education and Protection Fund (IEPF) Authority has recommended a ban on cryptocurrencies in India. IEPF, under the Ministry of Corporate Affairs, has written to the Department of Financial Services in the Ministry of Finance, for enforcing this ban.
Sources in the know said that the ban has been recommended under the aegis of being a move to protect investors from parking their money in dubious schemes. Officials in the know also said that IEPF can recommend a ban on cryptocurrencies since its role has been defined to educate and protect investors.
“We have written to the DEA (Department of Economic Affairs) recommending a blanket ban on cryptocurrencies in India. This has been reiterated at a recent inter-departmental meeting too where everyone was on the same page,” the official aware of the move told BusinessLine .
This move is significant in light of the RBI recently excluding crypto-related start-ups/entities from using a proposed regulatory sandbox. This has been highlighted in a draft proposal published by the RBI last week.
The Centre had set up a panel in December 2017 headed by the Secretary, DEA, to examine a framework for regulating cryptocurrencies in the country. Other members of the panel include representatives from the Securities and Exchange Board of India and the RBI.
RBI’s diktat to banks
In April 2018, the RBI issued a diktat asking banks and financial institutions in the country to stop all banking activities and financial transactions with cryptocurrency exchanges.
The RBI order had adversely impacted the businesses of over a dozen crypto exchanges, including Zebpay, Koinex, Coindelta, Unocoin, and Belfrics.
Earlier this month, China’s National Development and Reform Commission (NDRC) had proposed that cryptocurrency mining, including that of bitcoin should be phased out as they did not adhere to relevant laws and regulations, were unsafe, wasted resources or polluted the environment. Cryptocurrency mining has been added to a list of more than 450 activities that the NDRC seeks to curtail.
While the draft has not been finalised, China’s move is being viewed as a stand against cryptocurrencies that the nation would be taking soon. “Western nations are now looking at India to take a stand against the cryptocurrencies,” the IEPF official said.
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